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  • Deductions you can claim

    You can claim income tax deductions relating to income you earn. To claim a deduction:

    • you must have spent the money and not been reimbursed
    • the costs must relate to doing your job and can't be a private expense (such as travel from home to the job)
    • work out how much of the total expense is for your business and how much for personal use
    • you must keep appropriate records to prove your claim.

    Any fees or commission charged by a sharing economy facilitator can be claimed as a deduction.

    Other deductions will depend on the goods or services you are providing.

    Apportioning deductions

    If your expenses are for both work and private use, you can only claim a deduction for the work-related portion. You will need to work out the percentage that reasonably relates to your work use.

     

    Example – Establishing what expenses you can claim

    Claire has a part-time job and has been regularly earning extra income by cleaning, gardening and delivery jobs she finds through an online facilitator. However, she’s not sure how to work out what she can claim as deductions.

    Over the past week, Claire, who owns her own vehicle, spent two hours on Thursday cleaning houses, one hour on Friday making a delivery, two hours on Saturday gardening and one hour on Sunday making another delivery. Altogether she spent six hours providing services for a fee.

    When Claire prepares her tax return at the end of the financial year, she needs to look at all the work she has done over the year to work out her deductions and claim them in her tax return.

    To work out what she can claim, Claire needs to know what expenses are directly related to her work and can be claimed.

    Her expenses for income tax purposes are:

    • for her car
    • mobile phone costs
    • online facilitator fees
    • some gardening tools and cleaning supplies.

    She works out how much she can claim for each expense, by apportioning expenses that are partially personal use:

    Table of Claire's expenses, type of use and what she can claim

    Claire’s expenses for that week

    Type of use

    What she can claim after apportioning

    Car expenses – $50

    Mostly personal use

    20% is for business use

    Tip: Claire uses the ATO app myDeductions tool to add her trips when picking up jobs.

    Her yearly log book percentage if she uses the log book method

    Mobile phone plan –$10

    Mostly personal use

    5% is for business use

    Claire uses her itemised phone bill to figure this out.

    Tip: By keeping track for a four-week period - she can use this to determine ongoing business use.

    Her yearly usage percentage

    Online facilitator fee – $10

    100% is for business use

    $10

    Cleaning supplies – $20

    Business only

    Tip: Claire keeps a separate supply for taking to cleaning jobs she gets through the app.

    $20

    Gardening tools – $30

    Business and personal

    80% is for business as she uses these tools for her own garden

    See also: Low-value assets

    80%

     

    End of example

    See also:

    Last modified: 05 Sep 2017QC 53223